Press Releases

December13,2013

Key Findings in 2013 First Business Economic Survey of Milwaukee-Waukesha Counties

(BROOKFIELD, WI) – December 13, 2013 – Key findings of the 2013 First Business Economic Survey of Milwaukee and Waukesha Counties, which was conducted by the University of Wisconsin’s A.C. Nielsen Center for Marketing Research in September and October of 2013, indicate changes in operating costs as a percentage of revenue. Milwaukee and Waukesha businesses are more optimistic about performance in 2014 than in any year since the surveys inception.

Key Findings for 2013:

A statistically significant number of firms in Milwaukee and Waukesha counties report a fall in Operating Costs as a Percent of Revenue.

The percent of companies reporting an increase in Operating Cost as a Percent of Revenue fell 8.4%, a statistically significant amount, from 61.9% in 2012 to 53.5% in 2013.

The percent of companies with no change in Operating Cost as a Percent of Revenue increased 7.5%, a statistically significant percentage, from 16.2% in 2012 to 23.84% this year.

Companies also expect a statistically significant fall in Operating Costs as a Percent of Revenue in 2014.

Companies in Milwaukee and Waukesha Counties are more optimistic about performance in 2014 than in any year in the history of this survey.

A statistically significant, record high, of 73% of companies expect to perform better in the coming year, compared to 65% of businesses in 2013.

Companies that expect worse performance has decreased to 27% from the 2013 percentage of 35%, this change is also statistically significant.

The percent of companies projecting a decrease in Profitability for 2014 fell a statistically significant percent, from 26.7% last year to 19.1% this year.

The highest percent of companies cited domestic sales shortfall as a reason for low performance (75.7%). Behind domestic sales businesses rank high operating costs and a slowdown in the housing market (Both 62.5%) as reasons for low performance in 2013.

While not statistically significant the trajectory seen in increasing and decreasing Sales Revenue reversed five year trends.

Companies reporting an increase in Sales Revenue reversed an upward trend seen since 2009. The percent of companies reporting an increase in Sales Revenue fell by 6.7%, from 52.2% in 2012 to 45.5%.

The percent of companies reporting decreased Sales Revenue this year rose by 4.16% from 38.7% in 2012 to 42.9% this year. This change marks a reverse in the downward trend seen since 2009.

Similar to the last two years- almost 60% of companies in Milwaukee and Waukesha counties report the same Number of Employees in 2013.

The percent of businesses reporting a decrease in Number of Employees rose slightly by less than 2%, from 22.0% in 2012 to 22.4% this year.

The percent of businesses reporting an increase in the Number of Employees fell slightly, from 19.0% in 2012 to 18.3% this year.

While not statistically significant, Wages increased in Milwaukee and Waukesha counties in 2013, the percent of companies reporting an increase rose, while the percent reporting no change or a decrease fell.

The percent of firms reporting an increase in Wages grew from 45.1% last year to 50.2% this year.

The percent of firms reporting no change in Wages or a decrease in Wages both fell by approximately 2.5%.

Although not statistically significant, companies moved from increases and decreases in Pricing in 2012 to no change in 2013.

The number of companies reporting an increase in Pricing fell from 49.6% in 2012 to 45.7% this year.

The number of companies reporting a decrease in Pricing fell as well by slightly more than 1%.

Companies report virtually no change in Profitability in 2013, decrease; increase and no change in Profitability all vary by less than one percentage point when compared with 2012.

While not statistically significant, more businesses are operating at or above 90% capacity and slightly fewer businesses are operating under 70% capacity- this continues the prior year trend.

This was the sixth year for the study. The survey was sent to 8,039 businesses in Milwaukee and Waukesha Counties that were reported to have five or more employees and was addressed to the CEO, CFO, President, and/or business owner. The survey asked respondents to evaluate the current, and predict the future performance of their businesses on eight key economic indicators in each of the following areas: Sales Revenue, Profitability, Total Operating Costs as a Percentage of Revenue, Capital Expenditures, Number of Employees, Overall Wage Change, Change in Pricing, and Operating Capacity.

About First Business Financial Services, Inc.

First Business Financial Services, Inc. (Nasdaq:FBIZ) is a Wisconsin-based bank holding company, focused on the unique needs of businesses, business executives, and high net worth individuals. First Business offers commercial banking, specialty finance, and private wealth management solutions, and because of its niche focus, is able to provide its clients with unmatched expertise, accessibility, and responsiveness. For additional information, visit www.firstbusiness.com or call (608) 238-8008.